WRAP's vision is a world in which resources are used sustainably. Our mission is to accelerate the move to a sustainable resource-efficient economy through re-inventing how we design, produce and sell products; re-thinking how we use and consume products; and re-defining what is possible through recycling and re-use.

Business leaders will be empowered if they drive sustainability into their business

19/12/2014

Are business leaders ready to drive the sustainability movement into their businesses? WRAP's chief executive Liz Goodwin has the answer...

I am often asked the question - are business leaders ready to drive the sustainability movement into their businesses? This also reflects some of our experiences at WRAP - many leaders do seem reluctant to confront the challenges associated with driving sustainability, such as existing reward systems geared towards short term performance and lack of support across the board. But there is evidence of CEOs who for a wide range of reasons – business, personal vision - have taken the decision to make a difference - and they are doing a great job of it. I know - I work with many of them, and I can see why despite the challenges, the sustainable option can be a more attractive prospect.

‘Business as usual’ is not always the safest path

It’s been tough out there. In the last decade many businesses that were once high street leaders have disappeared from sight. The online market place came and it conquered. The fight for market share in some sectors is intense. Margins have been squeezed. A big lesson has been that many of the businesses that did not change saw their business models become obsolete almost overnight. Stalwarts of the high street that prioritised short term returns against future-proofing perhaps did not fully focus on what was coming, and ultimately paid the price.

There is an issue of being able to clearly see the path of least risk. But the ‘business as usual’ path is not always the safest – it can be a path covered in black ice. In reality, navigating the path of least risk often means the one where businesses can become ‘future-proof’: resilient against the changes in demand and expectation. The pressure for organisations to become sustainable as a business imperative is growing: the sooner they find ways to understand and adopt this to be able to implement sustainable practices, the less the risk of a knockout blow. That resilient way of working – sustainable in its broadest sense - is no longer just an adornment for CSR reports.

Sustainability vs economic gains: two sides of the same coin

It is not just about overhauling your business model to simply keep the wheels in motion. There are ways to accelerate businesses’ economic gains too.

Take the electricals market for example. Research by WRAP has shown that customers value durable products, but currently expect their workhorse products such as washing machines to only last around three years. Afterwards, they are thrown away leaving customers feeling disappointed and free to move to a competitor.

But what if these products were built to last? What if they included a service and repair package? And what if the item was taken back when it did reach its end of life so the value from the materials used in manufacture could be retained?

Large retailers wanting to adopt trade-in models for example, could dip their toes in initially through an incubator project if the Board didn’t want to dive in at the deep end. Start small, just one or two stores or an online portal, and build up. If it works well, roll it out on a wider scale. If not, rethink your approach. Be smart in the implementation process and risks will be reduced. Asda demonstrated this well with their dedicated tech trade-in site where customers can value their old products and send them into be recycled in exchange for cash.

On the other hand, there are companies out there that are putting sustainability at the heart of their strategy. Take ‘iameco’, who pride themselves on being the world’s first ecologically sustainable computers, specifically designed for reuse and built to last around three times longer than average. It is innovative, and their PCs’ carbon footprint is said to be 70% less than the average PC.

New studies have even shown that sustainable businesses are more profitable than their unsustainable counterparts, so by placing sustainability first, you are also putting economic performance alongside it too. Sustainable business is the next online store, and CEOs must to be willing to adapt.

Buying into a future with no warranty

As Sir Ian Cheshire once famously said “I’d rather disrupt my own business than have a competitor do it for me”. Kingfisher is now working towards a closed-loop system, and it is working well for them. Sustainability is not just an optional moral duty. Sustainability means business. Disruption is inevitable for those who resist change. But it is easy to understand why some CEOs might not be taking the issue of sustainability as seriously as others. It’s hard to imagine a future in which replacing a car tyre, replenishing your fridge with food and replacing a light bulb were no longer an automatic passage of right. The technological age has made getting access to these products all the more easier, but there is no warranty or guarantee on the future on having readily available materials.

If we were to think of the world and its resources as a supermarket stocked full of products, then the supermarket would already be crowded. The world population now sits at 7 billion, but by 2050, we should expect that number to be toppling over 9 billion with a third of that population set to join the middle classes. Studies show 80% of the world’s middle class will live in emerging economies accounting for 60% of global consumer spend. We have perhaps become all too reliant on the world always having its shelves fully stocked of resources. But we are rapidly entering an era where supply can’t keep up with demand. Just to illustrate, 19th August marked ‘Earth overshoot day’ – by that point in the year we had already used a year’s worth of resources.

As Sir Stuart Rose, formerly of Marks and Spencer, now Ocado, once said: ‘We've potentially got a planet which is going to go bust any day’. Personally, I’d rather that day never came. Who could disagree? So what are we going to do?

Liz Goodwin is the chief executive of WRAP, which works with businesses, individuals and communities to achieve a circular economy through helping them reduce waste, develop sustainable products and use resources in an efficient way.